From Car Ownership To Car Sharing: The Changing Face Of Mobility
It is no secret that the need for personal mobility is unprecedented in the country as people search for alternatives to shared mobility
The scars left by the first wave of the COVID-19 pandemic had just started to heal when the second round of coronavirus infection hit the country. The resurgence of COVID-19 cases led to lockdowns, thereby posing new challenges for businesses across verticals.
However, on the bright side, the car rental platforms are gradually getting the booster shot with the second wave of coronavirus. There is an existing paranoia about health and hygiene and as a result, customers are increasingly looking for a personal mobility option for their everyday needs that is flexible, cost-efficient, and safe.
The Changing Face of Mobility
It is no secret that the need for personal mobility is unprecedented in the country as people search for alternatives to shared mobility. Currently, the number of commuters using public transport, such as bus or Metro, is far lower than before the pandemic, with customers citing concerns over the challenge of keeping their distance from others. Moreover, many car owners who previously had left their vehicles at home in favor of public or shared transportation are now taking them out as they see travelling by car as the safe alternative. The desire for personal mobility is exceeding that of shared.
At the same time, for those who do not own a car, buying a brand new vehicle is also not a feasible solution. This is where rental cars come into the picture.
Commuters are gradually turning to renting or leasing cars to get about without the pre-pandemic practice of sharing with co-riders.
Therefore, be it going for a grocery errand, or taking a weekend getaway, renting a car, taking out a short-term lease or signing up to a subscription are seen as viable alternatives to car ownership. These are perceived as the most affordable, and quickest way of acquiring a car, while also being a safe personal mobility option.
The Rise of Car Subscription Model
It's not as if car rental services and cars on subscription or lease were non-existent in pre-COVID times. It was already growing even before the onset of coronavirus. The global crisis has merely accelerated the adoption of rental cars and cars on subscription or lease in ways that were never witnessed before. In fact, by 2025, the global automobile rental and leasing market is expected to grow at a CAGR of 8.1 per cent and reach $421.3 billion in 2023.
Factors Contributing to the Growth of Car Rental or Subscription Model
Optimistically speaking, the subscription or the lease model is rapidly gaining popularity in the car rental industry. It is because this model allows the customer to enjoy temporary ownership of the vehicle without worrying about additional costs such as a down payment, EMI (equated monthly installment) or insurance, maintenance, thereby making it a hassle-free affair.
The idea of car rental is becoming a hit, particularly amongst the millennials. It's also an answer for people who cannot or do not want to commit to full-time car ownership. Besides, car rental is convenient for those who are in transferable jobs, as it eliminates the need to transport their car from one place to another as they move.
Therefore, key players in this space are leaving no stone unturned to ensure the best customer experience along with maintaining and providing maximum safety and hygiene. They are also leveraging cutting-edge technologies such as AR (Augmented Reality), AI (Artificial Intelligence), and ML (Machine Learning) to bring in unique features such as 24x7 chatbots, keyless entry, and so on, to offer customers a seamless experience.
So, customers can now have the run of a car by simply paying a nominal subscription fee for the subscription period that ranges between 1-36 months. The subscription model is indeed emerging as an ideal way to maintain privacy, flexibility, and hygiene. To that end, subscribing to a rental is one of the logical steps for anyone who is looking to enjoy ownership of a car without incurring additional costs.
Having said that, it is also evident that traditional car ownership is no longer considered a status symbol. Rather, it is seen as a form of liability.. So, people are gradually dismissing a car-purchasing decision and opting for the subscription model.
All in all, we are experiencing a change in how commuters are traveling today and seeking to travel in the years to come. And, to meet these changing demands, players in the car rental space are going the extra mile to deliver a top-notch customer experience. They are already on their way to transform the existing ways of mobility. They are in fact giving a face-lift to their wide range of services using technology, thereby making the subscription model an evergreen solution for the foreseeable future.